Lifecycle Cost analysis (LCC
Every company executive faces the challenge of finding a business model that minimizes costs while maximizing investment returns. Business operation is primarily about turning a profit without incurring too much cost. This is where Lifecycle Cost analysis (LCC) comes in. It is a way of evaluating the total cost of acquiring, operating, and disposing of a system or facility. It is recommended that LCC is carried out before acquiring equipment and structures to find the most suitable solutions.
Lifecycle Cost analysis is the best way to guarantee project savings by comparing various construction industry design models. LCC analysis considers long-term savings and costs as opposed to the commonly applied ROI-based analysis. This means that the total costs and savings on a building or system are monitored over its entire lifetime. Building/system lifespan falls into five stages, namely, concept planning, design, construction, operations, and disposal/replacement. At each of these stages, LCC monitoring and management is critical.
Although the construction industry is yet to realize the full potential of Lifecycle Costing, the concept is starting to gain traction as more companies discover the many benefits associated with it. The Lifecycle cost analysis process takes place in three steps:
1. Identifying costs that impact total ownership costs
If you want to minimize lifecycle costs, the first step is to identify the factors that influence total ownership costs the most. It is possible to determine what costs you have to watch out through a structured and well-defined lifecycle cost analysis.
2. Determine design improvement areas
Once you clearly identify the major construction expenditure avenues, it’s then possible to find areas of design improvement that will allow you to test various solutions to achieve your desired objectives.
3. Weighing options to identify most workable solutions
There are different alternatives in the construction project to choose from, each with corresponding costs and benefits. Comparing these options in terms of the expenses versus benefits will allow you to relocate costs to maximize the project’s gains.
This process shows that lifecycle costing is an easy-to-follow process with great benefits to the company. It’s important to undertake the task as early as possible, especially in the construction industry, as it’s relatively easier to make adjustments at the design stage. Once the project has already begun, you won’t have as many options on the table to make adjustments.
Lifecycle costing services near me!
Iridium is an Engineering and Assets Management Consultancy firm in the Middle East helping our clients to easily and effectively manage their assets. Our primary goal at Iridium is to provide a flexible and customized Support Service to assure high efficiency, high quality, and cost reduction through the integrated Logistics Support system. Additionally, we offer lifecycle cost management services which includes initial LCC calculation, monitoring and optimization for the construction industry.
Iridium is committed to optimize business assets through Lifecycle Cost analysis.
Visit our website to learn more about our services>> iridiumils.com